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The Effect of Motherhood on Wages and Wage Growth: Evidence for Australia

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  • TANYA LIVERMORE
  • JOAN RODGERS
  • PETER SIMINSKI

Abstract

Labour market theory provides several reasons why mothers are likely to earn lower hourly wages than non-mothers. However, the size of any motherhood penalty is an empirical matter and the evidence for Australia is limited. This paper examines the effect of motherhood on Australian women’s wages and wage growth using a series of panel-data models which control for other relevant factors, both observed and unobserved. Using data from the Household, Income and Labour Dynamics in Australia (HILDA) survey, an unexplained motherhood wage penalty of around four per cent for one child, and eight per cent for two or more children, is found. Further analysis suggests that the wage penalty emerges over time through reduced wage growth, rather than through an immediate wage decline after the birth of a child. This reduction in wage growth is consistent with discrimination but also with a reduction in mothers’ work effort.
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Suggested Citation

  • Tanya Livermore & Joan Rodgers & Peter Siminski, 2011. "The Effect of Motherhood on Wages and Wage Growth: Evidence for Australia," The Economic Record, The Economic Society of Australia, vol. 87(s1), pages 80-91, September.
    • Handle: RePEc:bla:ecorec:v:87:y:2011:i:s1:p:80-91
    DOI: j.1475-4932.2011.00745.x
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    1. Catalina Amuedo-Dorantes & Jean Kimmel, 2005. "“The Motherhood Wage Gap for Women in the United States: The Importance of College and Fertility Delay”," Review of Economics of the Household, Springer, vol. 3(1), pages 17-48, September.
    2. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75(4), pages 352-352.
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    Cited by:

    1. Deborah A. Cobb‐Clark & Lihini De Silva, 2021. "Participation, Unemployment, and Wages," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(4), pages 482-493, December.
    2. Belinda Hewitt, 2021. "The Dynamics of Family Formation and Dissolution," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(4), pages 506-517, December.
    3. Charlotte H. Feldhoff, 2021. "The Child Penalty: Implications of Parenthood on Labour Market Outcomes for Men and Women in Germany," SOEPpapers on Multidisciplinary Panel Data Research 1120, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Erik Lundquist & Hanna Ekl f, 2017. "The Motherhood Wage Penalty: A Varieties of Capitalism Approach," LIS Working papers 710, LIS Cross-National Data Center in Luxembourg.
    5. Pritchett, Irina, 2015. "Wage Penalties for Motherhood and Child-rearing in Post-Soviet Russia," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205241, Agricultural and Applied Economics Association.
    6. Tarja Viitanen, 2014. "The motherhood wage gap in the UK over the life cycle," Review of Economics of the Household, Springer, vol. 12(2), pages 259-276, June.
    7. Nizalova, Olena Y. & Sliusarenko, Tamara & Shpak, Solomiya, 2016. "The motherhood wage penalty in times of transition," Journal of Comparative Economics, Elsevier, vol. 44(1), pages 56-75.
    8. Héctor Alberto Botello-Penaloza & Isaac Guerrero-Rincón, 2019. "Las leyes de licencia de maternidad y el mercado laboral en Colombia," Revista Economía y Región, Universidad Tecnológica de Bolívar, vol. 13(1), pages 67-86, June.

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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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